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Buying a property or buying into a group owned property takes one thing that has nothing to do with luck. Some new investors spend a lot of time worrying about every tiny detail before a property is purchased. The one thing that every person needs regardless of property location or condition is money. A turnkey property is one of the least expensive types of real estate that you can buy. Not all people have immediate access to cash or other liquid assets to make a purchase. If financing is your only option, you should understand the differences between a mortgage broker vs mortgage banker. Your investing future could depend on the professional that you select to buy your first investment property.
Advantages of a Mortgage Broker
A mortgage broker is a financial professional that works to find the best loan possible. These experts usually work with multiple banks and lenders. It is from the connections that brokers have that can help get you the lowest interest rate. If you are struggling to put together a down payment, a mortgage broker will pull a lot of strings and help get the qualifications eased up a bit. A good mortgage broker is hard to find and one that will ultimately be your go-to professional in your real estate team. One of the fastest ways for you to get loan approval is by working one-on-one with a broker. A broker is great if you have less than perfect credit or any other issue that could complicate a traditional mortgage from a bank.
How brokers make money is easy to understand. A broker is actually paid a comission of the sale of a mortgage package to a banker. The broker negotiates the best deal and the banker is the one that finalizes the transaction. One advantage of working with brokers is that no further costs or dealings are required. After the transaction is approved, a broker is free to go away until you need him or her in the future. It is an excellent way to do business and one that does not leave you with strings attached.
Advantages of a Mortgage Banker
A mortgage banker is the person that makes the decsion to offer a mortage to you. It is the services of these professionals that help every person that is eligible receive a loan at a fair interest rate. Most bankers are those that have been in the banking business for decades and have experience working with all borrowers. A banker could alert you to problems with your loan application in advance to help you get faster approval. The comissions that a banker charges are often much less than what a broker will charge. Most banks do not have to disclose the comission amount in the loan documentation but they always make something. Setting you up to buy the perfect investment property does come at a cost.
Unlike a broker that deals with many people, a mortgage banker is usually part of a local or national bank. The full support of these banks is offered and the process of loan approval can be fast. You can usually meet in person with a mortgage banker to discuss your plans for investment property and might even be able to lower the down payment required. Bankers have a high rate of accuracy and eliminate errors in judgment or mortgage documents. The research and approval process is thorough and the decision is always final.
There are pluses for each professional that you use to help you obtain a loan. You are not at a disadvantage by comparing mortgage broker vs mortgage banker before you purchase. It is always smart to shop around and get the best interest rate before closing on a loan.